May 30 (Bloomberg) -- KKR & Co., the buyout firm run by
Henry Kravis and George Roberts, won a $225 million commitment
from the Oregon Investment Council for its second private-equity
fund devoted to Asia.

The KKR Asian Fund II LP is seeking as much as $6 billion
to deploy across the continent. Roberts and Joseph Bae, managing
partner for Asia, pitched the fund to the council at a meeting
in Tigard, Oregon, today. The six-member board, which
administers state pensions, voted unanimously to commit the
money.

The state’s investment in KKR’s previous Asia fund, started
in 2007, was generating a 15 percent internal rate of return as
of March 31, according to investment council documents. New
York-based KKR is interested in companies that serve the growing
middle class in China and elsewhere on the continent, Roberts
and Bae told the board.

The U.S. buyout firm has backed milk producer Ma Anshan
Modern Farming Co. in China and is on the lookout for other
consumer-based businesses.

The firm has been taking minority stakes in Chinese
companies, veering from the private-equity tradition of
purchasing entire companies or majority stakes.

“The best businesses in China, they’re just not for
sale,” Bae told the council.

On Site

KKR helps manage its Asia investments, he said. At Ma
Ashan, known locally as Modern Dairy, KKR personnel are on site
five days a week, getting involved in details such as barn
design.

The Oregon Public Employees Retirement Fund is putting $200
million into the new KKR fund. The Common School Fund, another
pool administered by the investment council, is committing $25
million.

One investment council member, Harry Demorest, said he
would have approved doubling the pension’s investment in the new
KKR Asia fund to $400 million.

In an interview after the meeting, Roberts said the U.S.
economy will probably slow in the second half of the year. He
cited a decline in consumer confidence and apprehension about
the November election.

“Any time you have uncertainty, people pull back on their
spending,” Roberts said. “I think you’re going to see slower
growth in the second half of the year than you saw in the first
half. I’m not an economist. That’s my personal belief.”

Prepared for ‘Onslaught’

The private-equity industry was prepared for the negative
attention it has gotten as a result of Mitt Romney, a founder of
Bain Capital LLC, being a candidate for president, Roberts said.
Bain has been criticized for cutting jobs at companies it bought
and focusing solely on profit.

“It’s not as though we’ve been unprepared for this
onslaught,” Robert said in the interview.

KKR’s companies, including Dollar General Corp., the
discount retailer it acquired in 2007, created 25,000 U.S. jobs
in 2010 and 2011, Roberts said.

“Bain, like all of us, is going to have losses,” Roberts
said. “Bain has had a lot more work out than haven’t worked
out. I think they are being treated pretty unfairly.”